The Ontario Securities Commission has decided that Eugene Melnyk, former chairman and owner of pharmaceutical giant Biovail Corp., didn't violate any of the province's securities laws in the way he handled an earnings warning in 2003. But the commission did find that his actions were contrary to the public interest.

Tom Atkinson, Director of Enforcement for the OSC, said: "The decision speaks for itself. Mr. Melnyk was found not to have contravened Ontario securities law but his conduct was found to be contrary to the public interest."

The commission has requested Mr. Melnyk schedule a date for a sanctions hearing within the next 30 days.

"The commission's decision relates primarily to an earnings warning issued by Biovail in October 2003. I am pleased that the commission found that Biovail acted appropriately in issuing an earnings warning and that numerous aspects of that earnings warning were accurate," Mr. Melnyk said in a statement. "I am also pleased with the commission's finding that I did not contravene Ontario securities law at any time."

Biovail, which completed a merger with U.S.-based Valeant Pharmaceuticals this week, now goes by Valeant Pharmaceuticals International.

The OSC has alleged Mr. Melnyk and the company used an October 2003 trucking accident that destroyed a shipment of drugs to cover up revenue shortfalls, misleading investors.

Mr. Melnyk said he was focused only on "big picture" issues with the company in testimony at a hearing in April 2009.

Other Biovail executives had reached a settlement with the OSC on the issue in February 2009, paying $5-million in fines and $1.5-million in costs.

Mr. Melnyk also paid US$1-million to the U.S. Securities and Exchange Commission in the same period to settle a claim he did not properly disclose ownership of more than 5% of Biovail's shares.